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WardsAuto North American Barometer and 6-Month Outlook Q4 2014/Q1 2015

WardsAuto North American Barometer and 6-Month Outlook Q4 2014/Q1 2015. WardsAuto 6-Month North American Outlook – Q4 2014/Q1 2015 Industry Forecasts. Sales- N.America ( Yr/Yr % Change). Production- N.America ( Yr/Yr % Change). Inventory - U.S. (Yr/Yr % Change).

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WardsAuto North American Barometer and 6-Month Outlook Q4 2014/Q1 2015

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  1. WardsAuto North American Barometer and 6-Month Outlook Q4 2014/Q1 2015

  2. WardsAuto 6-Month North American Outlook – Q4 2014/Q1 2015 Industry Forecasts Sales-N.America (Yr/Yr % Change) Production-N.America (Yr/Yr % Change) Inventory - U.S. (Yr/Yr % Change)

  3. North American Industry By the Numbers YTD Sales (Jan.-Aug.) Trailing 12-Mo. Sales U.S. Sales vs. Inventory Y/Y Percent Change by Segment Group (Aug. 2014) Millions Production Straight-Time Utilization Available Production

  4. WardsAuto North American Outlook Q4 2014-Q1 2015 Product and Plant Actions

  5. U.S. Sales – Seasonally Adjusted Annual Rate (SAAR)(Light vehicles in millions)

  6. U.S. Sales – Q4 2014-Q1 2015 • Economics positive: GDP expected to continue fairly strong (~3%)through end of year • Enough inventory • Competitive • Interest rates still low • Off-lease • Fuel prices down

  7. U.S. Sales: Q4/Q1 Game-Changer Watch List • Economy creating more demand than projected • Robust incentives in midsize car, large-pickup segments • Another winter like last year • Geo-political issues hurt economy

  8. Manufacturer Pulse: Q4 2014 • Nissan • Hyundai/Kia • Volkswagen/Audi • Other • BMW • Mercedes • Subaru GM Ford Fiat-Chrysler Toyota Honda

  9. General Motors By-The-Numbers: Solid YTD Sales (Jan.-Aug.) Trailing 12-Mo. Sales U.S. Sales vs. Inventory Y/Y Percent Change by Segment Group (Aug. 2014) Millions Production Available Production Straight-Time Capacity Utilization

  10. General Motors: Why ? (?) Management still in major transition though less a concern (?) Recall: still not affecting sales, but continue to have negative impact on earnings (?) Globally, mixed bag. Had Q2 earnings difficulties in South America and Europe; made wage concessions in South Korea. China is good (-) Cadillac, though not the bread-and-butter division like Chevrolet, is important – not riding the luxury wave (+/-) Fundamentals still good. Overall decent product portfolio; should have sales gains in U.S. Q4-14, Q1-15

  11. Ford MotorBy-the-Numbers: Continue Share Decline YTD Sales (Jan.-Aug.) Trailing 12-Mo. Sales U.S. Sales vs. Inventory Y/Y Percent Change by Segment Group (Aug. 2014) Millions Production Available Production Straight-Time Utilization

  12. Ford Motor: Why ? (+) Was yellow last time (+) Negatives short-term (this year and 2015) (+) Making money in Asia; capacity expansion in China a major positive as long as the industry there keeps growing (+) Management transition appears smooth (+/-) Large part of U.S. sales, share loss is from trying to maintain some pricing power, but weakness will continue well into 2015 (-) Financial hit when lose 90,000 units of F-150 production, but spread from Sept. through Mar 2015.

  13. Fiat-Chrysler By-The-Numbers: Growth Slows YTD Sales (Jan.-Aug.) Trailing 12-Mo. Sales U.S. Sales vs. Inventory Y/Y Percent Change by Segment Group (Aug. 2014) Millions Production Available Production Straight-Time Utilization

  14. Fiat-Chrysler: Why ? (+)Overall sales, share, production still strong (though y/y volumes start to flatten) (+) Gradually solidifying North American product portfolio (+) Appear committed to Windsor investment, indicating don’t expect contentious negotiations next year with Canada union (?) But a lot of older product still behind sales gains; conceded in Q2 earnings report that U.S. incentives hurt margins (?) Lengthy early tooling shutdowns at plants in Canada, Mexico in Q1 and Q2 2015 a temporary drag (-) Corporate’s heavy dependence on North America

  15. Toyota By-The-Numbers: Turning Positive YTD Sales (Jan.-Aug.) Trailing 12-Mo. Sales U.S. Sales vs. Inventory Y/Y Percent Change by Segment Group (Aug. 2014) Available Production Production Straight-Time Utilization

  16. Toyota: Why ? (+) Sales, share still going up (+) Refreshed Camry should reassert its mid-car dominance; new Lexus NX small luxury CUV (?) Seeing some global weakness (-) Scion flagging

  17. Honda By-The-Numbers: Continue Weakness YTD Sales (Jan.-Aug.) Trailing 12-Mo. Sales U.S. Sales vs. Inventory Y/Y Percent Change by Segment Group (Aug. 2014) Millions Production Available Production Straight-Time Utilization

  18. Honda: Why ? (-)Declining sales and dull product portfolio (-) U.S. inventory down from year-ago; good that manufacturer is undertaking inventory control, but possibly indicative it does not expect sales to rebound rest of the year. (-) Acura trending down again after temporary success from two redesigned CUVs (MDX, RDX) (+) New Fit and Fit-based HR-V crossover built at new plant in Mexico (?) Behind expectations in China, though expect overall demand in Asia (especially Japan) to improve

  19. Nissan By-The-Numbers: Mostly Positive YTD Sales (Jan.-Aug.) Trailing 12-Mo. Sales U.S. Sales vs. Inventory Y/Y Percent Change by Segment Group (Aug. 2014) Millions Production Available Production

  20. Nissan: Why ? (+) Sales, production still running on nearly all cylinders (+) Added capacity leading to more sales (?) Not impressed with overall portfolio, including powertrain – does not seem to match market success (+/-) Pulling back on incentives for Altima – sign of a bigger trend?

  21. Hyundai/Kia By-The-Numbers: Improving YTD Sales (Jan.-Aug.) Trailing 12-Mo. Sales U.S. Sales vs. Inventory Y/Y Percent Change by Segment Group (Aug. 2014) Millions Production Available Production Straight-Time Utilization

  22. Hyundai/Kia: Why ? (-) Major labor issues in home-base South Korea – stills source a lot of product globally from there, including to North America (-) Rising won also hurting profits (-) Higher discounts in U.S. hurt Q2 profits (+)Kia sales up; new Sedona and Sorento on the way

  23. Volkswagen/Audi By-The-Numbers: Split Millions YTD Sales (Jan.-Aug.) Trailing 12-Mo. Sales U.S. Sales vs. Inventory Y/Y Percent Change by Segment Group (Aug. 2014) Production Available Production Straight-Time Utilization

  24. Volkswagen ( )/Audi( ): Why ? (-)Sales down for all VW brand vehicles (?) Union issue in Chattanooga over? (+) Much needed midsize CUV confirmed for Chattanooga (+) Still Audi, Audi, Audi – all new Small Luxury CUV Q3 on sale October; freshened A8 for ‘15 model year (+) Globally, VW doing well – on pace to outdo Toyota for world sales crown

  25. Rest of the Industry: Why ? (+)BMW, Mercedes, Land Rover Jaguar riding high on luxury wave (+) More new product coming from BMW (X6), Mercedes (C-Class, GLA) (+) Subaru share, sales heading for records with new Legacy and Outback (+) Mazda sales up; new Mazda2 in Q4, Miata in Q1 2015

  26. Long-Term Outlook SALES PRODUCTION 2014 Full-Year Forecast N. America: 16.9 million (+5.1%) U.S. 11.5 million (+5.9%) Canada: 2.3 million (-2.6%) Mexico: 3.2 million (+8.6%) 2014 Full-Year Forecast N. America: 19.3 million (+3.7%) U.S. 16.3 million (+5.2%) Canada: 1.8 million (+4.6%) Mexico: 1.1 million (+3.9%)

  27. CONTACT US TODAY: LISA WILLIAMSON lwilliamson@wardsauto.com 248-799-2642 AMBER MCLINCHA amclincha@wardsauto.com 248-799-2622

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